At the end of the second quarter, the region has a vacancy rate of 9.8 percent — the lowest rate since the third quarter of 2007, according to a new report by CBRE Nashville.

The report said that Nashville's office market is strong on several fronts, including office investment sales and strong activity in new leases."

"Several large investment sales strengthened the office market this quarter," according to the report. The deals including the sale of the Fifth Third Center at 424 Church St. for $90 million to Dallas-based Lincoln Property Company and the sale ofFourth & Church for $33.7 million to Albany Road Real Estate.

In addition, there is currently more than 1 million square feet of office space currently under construction in the Nashville market. Projects in the pipeline including Tractor Supply's 250,000-square-foot office building in Brentwood; the new Franklin Park office project in Williamson County; andHolladay Properties' Sheds on Charlotte, which is expected to add to the office mix in Davidson County.

3Q 2014 FORECAST: "During the first half of the year, the Nashville office market experienced a high level of leasing activity. Several large blocks of vacant space we saw coming down the pipeline last year are no longer available. By the end of the year, we will beginto see how new construction will affect our rates and concessions. If demand remains the same or increases,we will continue to see rising rents and more new construction in 2015." — Chris Grear, partner, Colliers Nashville

Industrial market

Nashville's industrial market saw a significant uptick in leasing in the second quarter of 2014, according to the report from CBRE.

In two of Nashville submarkets — the I-65/North and Interchange City — more than 1 million square feet of space was filled during the quarter with new activity. That reduced the region's industrial vacancy rate to 8.5 percent overall.

While new construction has slowed somewhat, CBRE did point to a couple of new projects in the industrial pipeline, including Panatonni Development's 108-acre site in CentrePointe Distribution Park in La Vergne, where they plan to construct three buildings totaling 1.3 million square feet.

In addition, IDI has 500,000 square feet of space in Wilson Commerce Center at the intersection of Couchville Pike and State Route 840 in Mount Juliet.